Court File No. CV-12-9539-00CL IN THE MATTER OF THE AND IN...

Court File No. CV-12-9539-00CL

ONTARIO SUPERIOR COURT OF JUSTICE

COMMERCIAL LIST

IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED

AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF TIMMINCO LIMITED AND BECANCOUR SILICON INC.

Applicants

MOTION RECORD (Returnable September 27, 2012)

(Re Stay Extension)

September 18, 2012 STIKEMAN ELLIOTT LLP Barristers & Solicitors 5300 Commerce Court West 199 Bay Street Toronto, Canada M5L 1B9

Ashley John Taylor LSUC#: 39932E Tel: (416) 869-5236 Maria Konyukhova LSUC#: 52880V Tel: (416) 869-5230 Kathryn Esaw LSUC#: 58264F Tel: (416) 869-6820 Fax: (416) 947-0866

Lawyers for the Applicants

6008612 v 1

INDEX

5178050 vl



COMMERCIAL LIST



Applicants

INDEX

TAB DOCUMENT

1. Notice of Motion, returnable September 27, 2012

2. Affidavit of Sean Dunphy, sworn September 18, 2012

A. Exhibit "A" - August 23 Affidavit

3. Draft Order



COMMERCIAL LIST


AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF TIMMINCO LIMITED AND aCANCOUR SILICON INC.

Applicants

NOTICE OF MOTION (Returnable September 27, 2012)

(Re Stay Extension)

Timminco Limited ("Timminco") and Bécancour Silicon Inc. ("BSI" and,

together with Timminco, the "Timminco Entities") will make a motion to a judge

presiding over the Commercial List on Thursday, September 27, 2012 at 10:00 a.m. or

as soon after that time as the motion can be heard, at 330 University Avenue,

Toronto, Ontario.

PROPOSED METHOD OF HEARING:

The motion is to be heard orally.

THE MOTION IS FOR:

1. An Order, substantially in the form attached to the Motion Record at Tab 3,

extending the Stay Period (as defined in paragraph 18 of the Initial Order of the

Honourable Mr. Justice Morawetz dated January 3, 2012) until December 7, 2012,

approving the reports of FTI Consulting Canada Inc. in its capacity as court-

appointed Monitor (the "Monitor") dated June 13, 2012 (the "Eleventh Report"),

August 13, 2012 (the "Twelfth Report"), August 27, 2012 (the "Thirteenth Report")

6008339 v2

2

and the report to be filed in connection with the within motion (the "Fourteenth

Report"), and granting such further and other relief as this Court deems just.

THE GROUNDS FOR THE MOTION ARE:

2. The Timminco Entities were granted protection from creditors under the

Companies' Creditors Arrangement Act, RSC 1985, c C-36 (the "CCAA") pursuant to an

Order of this Court dated January 3, 2012;

3. On June 15, 2012, the Court granted an Order (the "Claims Procedure Order")

approving a procedure for the solicitation, determination and resolution of claims

against the Timminco Entities and their Directors and Officers (the "Claims

Procedure") and the Monitor is in the process of reviewing the claims filed by

creditors (the "Claims") in accordance with the Claims Procedure;

4. BSI, its secured creditor Investissement Quebec ("IQ") and the Monitor

entered into an agreement (the "Reimbursement Agreement") which contemplated

a distribution to IQ while providing that IQ would repay to BSI such portion of the

distribution as may be necessary to satisfy a claim ranking in priority to IQ (a

"Priority Claim"). Three parties have made claims pursuant to the Reimbursement

Agreement asserting that they have Priority Claims, which the Timminco Entities,

the Monitor and IQ are currently developing a procedure to address;

5. Pursuant to an agreement of purchase and sale between QSI Partners Inc.

("QSI"), Timminco and 13SI dated April 25, 2012, as amended, QSI purchased assets

comprising effectively all of BSI's silicon metal business for a purchase price of

approximately $32 million, subject to a working capital adjustment (the "Working

Capital Adjustment"). The parties have not been able to resolve their differences

regarding the Working Capital Adjustment;

6008339 v2

3

6. The Timminco Entities continue to work diligently towards a sale of their

remaining assets, including certain real property assets, in an effort to maximize the

proceeds available to their creditors.

7. The Timminco Entities have been working diligently to resolve these and

other outstanding issues;

8. An extension of the Stay Period to December 7, 2012 is necessary to give the

Timminco Entities sufficient time to complete the claims process contemplated by the

Claims Procedure and attempt to resolve other outstanding issues in an expeditious

manner for the benefit of their stakeholders;

9. The Timminco Entities have acted and continue to act in good faith and with

due diligence;

10. The provisions of the CCAA and the inherent and equitable jurisdiction of this

Court;

11. Rules 1.04, 1.05, 2.03, 3.02 and 37 of the Rules of Civil Procedure, R.R.O. 1990,

Reg. 194, as amended; and

12. Such further grounds as counsel may advise and this Court may see fit.

THE FOLLOWING DOCUMENTARY EVIDENCE will be used at the

hearing of the motion:

1) the Affidavit of Sean Dunphy sworn September 18, 2012, and the

exhibits attached thereto;

2) the Eleventh Report of the Monitor;

3) the Twelfth Report of the Monitor;

6008339 v2

4

4) the Thirteenth Report of the Monitor;

5) the Fourteenth Report of the Monitor, to be filed; and

6) such further and other materials as counsel may advise and this Court

may permit.

September 18, 2012 STIKEMAN ELLIOTT LLP Barristers & Solicitors 5300 Commerce Court West 199 Bay Street Toronto, Canada M5L 1B9

Ashley John Taylor LSUC#: 39932E Tel: (416) 869-5236

Maria Konyukhova LSUC#: 52880V Tel: (416) 869-5230

Kathryn Esaw LSUC#: 58264F Tel: (416) 869-6820 Fax: (416) 947-0866


6008339 v2





(COMMERCIAL LIST)

Proceeding commenced at Toronto

NOTICE OF MOTION (RETURNABLE SEPTEMBER 27, 2012)

STIKEMAN ELuorr LLP Barristers & Solicitors 5300 Commerce Court West 199 Bay Street Toronto, Canada M5L 1B9


6008339 v2



COMMERCIAL LIST


AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF TIMMINCO LIMITED AND BtCANCOUR SILICON INC.

(Applicants)

AFFIDAVIT OF SEAN DUNPHY (Sworn September 18, 2012 re Stay Extension)

I, SEAN DUNPHY, of the City of Toronto, in the Province of Ontario, MAKE

OATH AND SAY:

1. I am the President of Russell Hill Advisory Services Inc., the Court-appointed

Chief Restructuring Officer ("CRO") of Timminco Limited ("Timminco") and

Bécancour Silicon Inc. ("BSI" and, together with Timminco, the "Timminco Entities"),

and as such have knowledge of the matters to which I hereinafter depose, except where

otherwise stated.

2. This affidavit is sworn in support of a motion brought by the Timminco Entities

seeking an Order, substantially in the form of the draft Order included with the Motion

Record, extending the Stay Period (as defined below) until December 7, 2012 (the "Stay

Extension"), among other things.

2

BACKGROUND

3. The Timminco Entities' primary business, the production and sale of silicon, was

carried on principally through BSI, a Québec-based wholly-owned subsidiary of

Timminco. BSI purchased silicon metal produced by Québec Silicon Limited

Partnership ("QSLP") for resale to customers in the chemical (silicones), aluminum, and

electronics/solar industries. QSLP was a production partnership between BSI and Dow

Corning Corporation, for resale to BSI's customers, of which BSI owns 51%.

4. Due to a number of factors, the Timminco Entities were facing severe liquidity

issues and were unable to meet their ongoing payment obligations. As such, the

Timminco Entities were granted protection from their creditors under the CCAA

pursuant to the Initial Order of the Honourable Mr. Justice Morawetz dated January 3,

2012 (the "Initial Order"). FTI Consulting Canada Inc. was appointed as monitor of the

Timminico Entities (the "Monitor") pursuant to the Initial Order. A copy of the Initial

Order is available, together with all other filings in the CCAA proceedings, on the

Monitor's website at: http: / /cfcanadalticonsulting.com/timminco.

STATUS OF CCAA PROCEEDINGS

Claims Process and Interim Distribution of Proceeds1

5. On June 15, 2012, the Court granted an Order (the "Claims Procedure Order")

approving a procedure for the solicitation, determination and resolution of claims

1 Capitalised terms used in this section not otherwise defined shall have the meaning ascribed to them in the August 23, 2012 Affidavit of Sean Dunphy (the "August 23 Affidavit"), attached hereto as Exhibit "A".

3

against the Timminco Entities and their Directors and Officers (the "Claims

Procedure").

6. The Claims Bar Date was July 23, 2012. Total claims filed against Timminco's

Directors and Officers was approximately $190,000 and total claims filed against BSI's

Directors and Officers was approximately $500,000. Claims filed against Timminco and

BSI totalled $48.5 million and $235 million, respectively. The Monitor has advised that it

is in the process of reviewing the claims filed by creditors (the "Claims") so that it can

assess whether to accept, revise or reject the amount and classification of such claims in

accordance with the Claims Procedure.

Interim Distribution and Priority Claims Process

7. As described in greater detail in the August 23 Affidavit, Investissement Quebec

("IQ") is a secured creditor of BSI. As at August 17, 2012, BSI owed IQ approximately

$29 million under the Secured Term Loan, with interest accruing in the amount of

approximately $10,000 per day.

8. In order to stop the continuing accrual of interest while preserving the ability of

other creditors of BSI to assert a claim ranking in priority to IQ and to provide for

reimbursement should any such claim be established (a "Priority Claim"), the

Tirnminco Entities, IQ and the Monitor entered into an agreement (the

"Reimbursement Agreement") which contemplated a distribution to IQ while

providing that IQ would repay to BSI such portion of the distribution as may be

4

necessary to satisfy a Priority Claim. Approximately $26 million has been paid to IQ to

date, with the remaining funds reserved for certain post-filing payables, court-ordered

priority charges and a potential payable under the working capital dispute (described

below).

9. Three parties made claims pursuant to the Reimbursement Agreement asserting

that they have Priority Claims: Mercer (Canada) Limited, the administration of the

Haley Pension Plan (the "Mercer Claim"); the BSI Non-Union Employee Pension

Committee and BSI Union Employee Pension Committee (the "Pension Committee

Claim"); and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy,

Allied Industrial and Service Workers International Union (the "USW Claim").

10. I am informed by the Monitor that it has determined that the Mercer Claim and

the Pension Committee Claim are Reimbursement Claims and that IQ has informed

each claimant that IQ disputes their claim to priority over IQ. The USW Claim is not a

Reimbursement Claim as the USW did not file a secured claim in the Claim Procedure,

which is a necessary condition of a valid Reimbursement Claim. The Timminco Entities,

the Monitor and IQ are currently developing a procedure for the adjudication of these

claims, subject to court approval.

Working Capital Determination

11. Pursuant to an agreement of purchase and sale between QSI, Timminco and BSI

dated April 25, 2012, as amended by the amending agreement dated June 1, 2012, QSI

5

purchased BSI's right, title and interest in and to, inter alia, assets comprising effectively

all of BSI's silicon metal business for a purchase price of approximately $32 million,

subject to a working capital adjustment (the "Working Capital Adjustment").

12. On July 12, 2012, QSI delivered a working capital adjustment statement (the

"Draft Statement of BSI Working Capital") to BSI, which BSI objected by letter dated

July 19, 2012. The parties have not been able to resolve their differences regarding the

Working Capital Adjustment and expect to bring a motion seeking a declaration of the

amount of same in the near future.

Asset Sales and Other Initiatives

13. The Timminco Entities continue to assess their options in respect of their

remaining assets, including certain real property assets, in an effort to maximise the

proceeds available to their creditors.

14. The Timminco Entities continue to undertake other steps for the benefit of the

estate and their creditors. A brief review of other activities undertaken or underway

since the appointment of the CRO includes the following:

a. Initiated discussions with United States counsel regarding potential

means of recovering value from real property in Memphis owned by

indirect subsidiary;

b. Held discussions with United States counsel regarding means of

continuing certain fraudulent transfer litigation in United States while

minimizing financial risk to estate;

c. Initiated sales process for Maple Leafs season tickets with discussions

with broker and with former purchaser of portion of tickets; and

d. Commenced review of on-going compliance costs and impact on sales

prospects regarding Haley property.

The Timminco Entities' Cash Flows

15. In its Eleventh Report, the Monitor provided a cash flow forecast which

indicated that the Timminco Entities had sufficient funding from the proceeds of sale

available for the extension of the Stay Period to September 30, 2012.

16. I am informed by the Monitor that it will be filing a report which will opine that

the Timminco Entities have sufficient funds available through to December 7, 2012.

REQUEST FOR EXTENSION OF THE STAY PERIOD

17. The Initial Order granted a stay of proceedings up to and including February 2,

2012, which was extended to April 30, 2012 and again to June 20, 2012 by Orders dated

January 27 and April 27, 2012 respectively (the "Stay Period"). Most recently, the Stay

Period was extended to September 30, 2012 by an Order dated June 14, 2012.

18. As described above, the Timminco Entities have been working diligently to

assess all Claims filed pursuant to the Claims Procedure. An extension of the Stay

Period to December 7, 2012 is necessary to give the Timminco Entities and the Monitor

sufficient time to, among other things, review the Claims and the Priority Claims filed

7

and assess whether the classification and amount of same should be accepted, revised

or rejected as previously described at paragraphs 5-9 of this affidavit.

19. Further, the extension of the Stay Period will allow the Timminco Entities

sufficient time to attempt to reach a resolution in relation to the working capital

determination as described in greater detail at paragraphs 10 and 11 of this affidavit

and address various other outstanding matters within the Timminco Entities' CCAA

proceedings.

20. It is my belief that the Timminco Entities have acted and continue to act in good

faith and with due diligence. The Stay Extension is appropriate in order to allow the

Timminco Entities to complete the claims process contemplated by the Claims

Procedure and to resolve outstanding issues in an expeditious manner that works for all

parties involved.

21. I do not believe that any creditor will suffer any material prejudice if the Stay

Period is extended as requested.

22. I am informed by the Monitor that it supports the Timminco Entities' request to

extend the Stay Period.

23. The stability provided by the stay of proceedings is critical to the Timminco

Entities in order to be able to continue assessing claims for the benefit of their creditors

and continue to wind down its business in an orderly manner.

8

PURPOSE OF THIS AFFIDAVIT

24. This affidavit is sworn in support of the Timminco Entities' motion for the relief

described in paragraph 2 hereof and for no improper purpose.

SWORN BEFORE ME at the City of Toronto, Province of Ontario, on September 18, 2012.

Commissioner for Taking Affidavits

Y■ • ix, owJ

IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. Court File No. CV12-9539-000 1985, c. C-36, AS AMENDED



(COMMERCIAL LIST)


AFFIDAVIT OF SEAN DUNPHY (SWORN SEPTEMBER 18, 2012)

STIKEMAN ELLIOTT LLP Barristers & Solicitors 5300 Commerce Court West 199 Bay Street Toronto, Canada M5L 1B9

Ashley John Taylor LSUC#: 39932E Tel: (416) 869 -5236 Maria Konyukhova LSUC#: 52880V Tel: (416) 869-5230 Kathryn Esaw LSUC#: 58264F Tel: (416) 869-5230 Fax: (416) 947-0866


THIS IS EXHIBIT "A", referred to in the Affidavit of Sean Dunphy, sworn on September 18, 2012.

Commissioner for Taking Affidavits



COMMERCIAL LIST

IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, RS.C. 1985, c. C-36, AS AMENDED


(Applicants)

AFFIDAVIT OF SEAN DUNPHY (Sworn August 23, 2012 re Interim Distribution to IQ)

I, SEAN DUNPHY, of the City of Toronto, in the Province of Ontario, MAKE

OATH AND SAY:

I. I am the President of Russell Hill Advisory Services Inc. ("Russell Hill"), the

Court-appointed Chief Restructuring Officer ("CRO") of Timminco Limited

("Timminco") and Becancour Silicon Inc. ("BSI" and, together with Timminco, the

"Timminco Entities" or the "Applicants"), and as such have knowledge of the

matters to which I hereinafter depose, except where otherwise stated.

2. This affidavit is sworn in support of a motion brought by the Timminco

Entities seeking an order (the "Interim Distribution Order") substantially in the

form of the draft Order included in the Motion Record at Tab 3 authorizing and

directing the Monitor to distribute cash (the "Interim Distribution") from the

proceeds of the Sale Transactions (defined and described below) to Investissement

Québec ("IQ"), a secured creditor of BSI, subject to certain reserves to be established

5999185 v9

- 2 -

by the Monitor and provisions of provisions of the Reimbursement Agreement (as

such terms are defined below).

BACKGROUND

3. The Applicants' primary business, the production and sale of silicon, was

carried on principally through BSI, a Québec-based wholly-owned subsidiary of

Timminco. BSI purchased silicon metal produced by Québec Silicon Limited

Partnership ("Québec Silicon") for resale to customers in the chemical (silicones),

aluminum, and electronics/solar industries. Quebec Silicon was a production

partnership between BSI and Dow Corning Corporation, for resale to BSI's

customers, of which BSI owned 51%. BSI also produced solar grade silicon for

customers in the solar photovoltaic industry through its unincorporated division,

Timminco Solar. Timminco Solar ceased active production of its solar grade silicon

in January 2010. Timminco also formerly operated a magnesium business. The

Ontario-based manufacturing operations of Tirnminco Metals were discontinued in

June 2008.

4. As described in greater detail in the affidavit sworn by Peter A.M. Kalins on

January 2, 2012, in support of the Timminco Entities' application under the

Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended (the

"CCAA"), the Timminco Entities were facing severe liquidity issues and were

unable to meet their ongoing payment obligations as they came due.

5999185 v9

- 3 -

5. The Timminco Entities were granted protection from their creditors under the

CCAA pursuant to the Initial Order of the Honourable Mr. Justice Morawetz dated

January 3, 2012, as amended (the "Initial Order"). FTI Consulting Canada Inc. was

appointed monitor of the Timminco Entities (the "Monitor") pursuant to the Initial

Order. A copy of the Initial Order is available, together with all other filings in the

CCAA proceedings, on the Monitor's webs ite at:

http: / cf canad alticonsulting. com / timminc o.

STATUS OF PROCEEDINGS

Sale Transactions

6. Substantially all of BSI's operating assets have been sold pursuant to sales

transactions with Grupo FerroAtlantica, S.A. (the "Ferro Transaction") and with QSI

Partners Ltd. (the "QSI Transaction" and together with the Ferro Transaction, the

"Sale Transactions"). The Ferro Transaction was approved by the Court on May 22,

2012 and closed on June 14, 2012 and the QSI Transaction was approved by the

Court on June 1, 2012 and closed on June 13, 2012. The net proceeds of the Sale

Transactions total approximately $30 million and are currently being held by the

Monitor. No assets of Timminco were included in the Sale Transactions.

Claims Procedure

7. On June 15, 2012, the Court granted an Order (the "Claims Procedure

Order") approving a procedure for the solicitation, determination and resolution of

5999185 v9

- 4 -

claims against the Timminco Entities and the Timminco Entities' Directors and

Officers (the "Claims Procedure"). A copy of the Claims Procedure Order is

attached hereto as Exhibit "A".

8. The Claims Bar Date was July 23, 2012. Total claims filed against Timminco's

Directors and Officers was approximately $190,000 and total claims filed against

BSI's Directors and Officers was approximately $500,000. Claims filed against

Timminco and BSI totalled $48.5 million and $235 million, respectively. The Monitor

has advised that it is in the process of reviewing the claims filed.

Appointment of CRO

9. By Order of the Honourable Mr. Justice Newbould dated August 17, 2012,

Russell Hill was appointed as CRO of the Timminco Entities.

INTERIM DISTRIBUTION TO IQ

The Secured Term Loan

10. Pursuant to a term loan agreement dated July 10, 2009 (the "Term Loan

Agreement"), BSI received a secured term loan from IQ (the "Secured Term Loan").

A copy of the Term Loan Agreement is attached hereto as Exhibit "B".

11. The Secured Term Loan is guaranteed by Timminco and a secured by a

charge upon all of BSI's assets (the "Collateral"). A copy of the hypothec granted by

BSI is attached hereto as Exhibit "C".

5999185 v9

- 5 -

12. As described in the Fourth Report of the Monitor, dated March 7, 2012 (the

"Fourth Report"), the Monitor's counsel conducted a review of the security granted

to IQ and found that, subject to certain standard qualifications and assumptions,

IQ's security is valid, legal and enforceable. A copy of Fourth Report (without

appendices) is attached hereto as Exhibit "D".

13. As at August 17, 2012, the amount outstanding under the Secured Term Loan

totalled approximately $29 million. The Secured Term Loan earns interest at a

variable rate of Canada prime plus 9%, which is currently approximately 12% per

annum. As such, BSI is incurring interest in the amount of approximately $10,000

per day while the sale proceeds are earning very little in the current interest rate

environment. In my view, the best interests of BSI would be served by halting that

expense as soon as possible.

Reserve Fund

14. Payment of the amounts owing under the Secured Term Loan will be subject

to maintaining appropriate reserves for the Super-Priority Charges (defined below)

and other potential post-filing payables, in an amount to be determined prior to the

hearing of this motion and disclosed in the Monitor's Report to be prepared and

filed in connection with this motion.

15. By Order of the Honourable Mr. Justice Morawetz dated January 16, 2012, the

Court granted the following charges ranking ahead in priority to all other security

- 6 -

interests, trusts, liens, charges and encumbrances, statutory or otherwise in favour of

any person, notwithstanding the order of perfection or attachment:

(a) a super-priority charge to secure the fees and disbursements incurred in

connection with services rendered to the Timminco Entities both before

and after the commencement of the CCAA proceedings by counsel to the

Timminco Entities, the Monitor and the Monitor's counsel (the

"Administration Charge");

(b) a charge in favour of the recipients (the "KERP Recipients") of a key

employee retention program (the "KERP Charge"); and

(c) a charge in favour of the directors and officers of the Timminco Entities (the

"D&O Charge").

16. By Order of the Honourable Mr. Justice Morawetz dated February 8, 2012 the

Court granted an Order approving a DIP financing agreement (the "DIP

Agreement"), and granting a super-priority charge in favour of QSI Partners Ltd., as

lender (the "DIP Lender") under the DIP Agreement (the "DIP Charge" and,

together with the Administration Charge, the KERP Charge and the D&O Charge,

the "Super-Priority Charges"). The current ranking of the Super-Priority Charges is

as follows:

(a) First - the Administration Charge (in the maximum amount of $1,000,000);

(b) Second - the KERP Charge (in the maximum amount of $269,000);

5999185 v9

- 7 -

(c) Third - the DIP Charge; and

(d) Fourth - the D&O Charge (in the maximum amount of $400,000).

17. The KERP Recipients have been paid under the KERP and no amounts

remain owing to the beneficiaries of the KERP Charge. The DIP Lender has also been

paid under the DIP Agreement and no amounts remain owing to the DIP Lender.

18. The beneficiaries of the Administration Charge and the D&O Charge may still

be owed certain amounts pending the completion of the CCAA proceedings.

Additionally, there may be certain post-filing payables coming due prior to the

winding up of the CCAA proceedings. As such, the Timminco Entities are seeking to

have certain amounts, to be determined prior to the hearing of the motion, set aside

as a reserve to satisfy the Super-Priority Charges and any post-filing payables.

Claw Back Procedure

19. In order to stop the accrual of interest on the Secured Term Loan, the CRO

approached IQ in order to negotiate a mechanism to permit an interim distribution

to IQ as soon as possible while preserving the ability for other creditors of BSI to

assert a claim ranking in priority to IQ and, if such claim and priority is Finally

Determined (any such claim being a "Priority Claim"), provide for the

reimbursement of the necessary proceeds.

I Capitalized terms used in this section but not otherwise defined shall have the meaning attributed to them in the Reimbursement Agreement (defined and described below).

5999185 v9

- 8 -

20. Prior to the hearing of this motion BSI, IQ and the Monitor expect to enter

into an agreement (the "Reimbursement Agreement"), substantially in the form

attached hereto as Exhibit "E", which sets out a procedure whereby IQ will repay to

BSI by payment to the Monitor such portion of the Interim Distribution as may be

necessary to satisfy a Priority Claim (the "Claw Back Procedure").

21. The Claw Back Procedure provides that any party wishing to assert priority

over the Collateral must, within seven days of the issuance of the Interim

Distribution Order, file a preliminary form setting out the amount and nature of its

claim for priority over IQ. IQ, the CRO and the Monitor will review any such claims

and determine whether these claims should be placed on Schedule A to the

Reimbursement Agreement (a "Reimbursement Claim"). Should the parties not be

able to agree whether a particular claim is a Reimbursement Claim, IQ, the CRO or

the Monitor shall seek directions from the Court.

22. Once a Reimbursement Claim has been established, the claimant (a "Priority

Clahnant") will have two months from the date of the Interim Distribution Order to

submit materials asserting its priority over the Collateral.

23. Once the Priority Claimant's materials have been submitted, IQ the CRO and

the Monitor will, in accordance with the provisions of the Reimbursement

Agreement, determine whether such claim has priority over the Collateral (a

"Priority Claim"). The Reimbursement Agreement contemplates generally

following the process laid out at paragraphs 20-27 of the Claims Procedure Order.

5999185 v9

- 9 -

IQ, acting reasonably, will participate in any process taking place under the Claims

Procedure Order which could affect IQ's priority status in respect of the Collateral.

24. Upon determination that a Reimbursement Claim is a Priority Claim, IQ will

reimburse to BSI through the Monitor such portion of the Interim Distribution as

may be necessary to satisfy the Priority Claim within seven business days of the

determination that such claim is a Priority Claim.

25. I am informed by counsel to the Monitor and IQ that this motion for the

Interim Distribution is supported by the Monitor and IQ.

PURPOSE OF AFFIDAVIT

26. This Affidavit is sworn in support of the Timminco Entities' motion for the

relief described in paragraph 2 above and for no improper purpose.

SWORN BEFORE ME at the City of Toronto, Province of Ontario on August 23 2012.

Commissioner.for Taking Affidavits

Kathryn Esaw

5999185 v9

IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. Court File No. CV12-9539-00CL

1985, c. C-36, AS AMENDED



(COMMERCIAL LIST)


AFFIDAVIT OF SEAN DUNPHY (SWORN AUGUST 23, 2012)

STIKEMAN ELLIOTT LLP Banisters & Solicitors 5300 Commerce Court West 199 Bay Street Toronto, Canada M5L 1B9

Ashley John Taylor LSUC#: 39932E Tel: (416) 869-5236 Kathryn Esaw LSUC#: 58264F Tel: (416) 869-6820 Fax: (416) 947-0866




COMMERCIAL LIST

THE HONOURABLE MR. THURSDAY, THE 27TH

JUSTICE CUMMING

DAY OF SEPTEMBER, 2012



Applicants

ORDER (Re Stay Extension to December 7, 2012)

THIS MOTION, made by Timminco Limited and l3écancour Silicon Inc.

(together, the "Timminco Entities"), for an order, inter alia, (a) extending the Stay

Period (as defined below) until December 7, 2012; and (b) approving the Tenth,

Eleventh, Twelfth, Thirteenth and Fourteenth Report (as defined below and together,

the "Monitor's Reports") of FTI Consulting Canada Inc. in its capacity as the Court-

appointed Monitor of the Timminco Entities (the "Monitor"), was heard this day at

330 University Avenue, Toronto, Ontario.

ON READING the affidavit of Sean Dunphy sworn September 18, 2012 and

the Monitor's Reports, and on hearing the submissions of counsel for the Timminco

Entities, FTI Consulting Canada Inc., Investissement Quebec, QSI Partners Ltd.,

Mercer Canada, the Administrator of the Haley Pension Plan, BSI Non-Union

Employee Pension Committee, and the United Steel, Paper and Forestry, Rubber,

Manufacturing, Energy, Allied Industrial and Service Workers International Union,

6008347 v4

2

no one appearing for any other person on the service list, although duly served as

appears from the affidavit of service of Kathryn Esaw sworn September 18, 2012,

filed:

SERVICE

1. THIS COURT ORDERS that the time for service of the Notice of Motion and

the Motion Record is hereby abridged and validated so that this Motion is properly

returnable today and hereby dispenses with further service thereof.

STAY EXTENSION

2. THIS COURT ORDERS that the Stay Period (as defined in paragraph 18 of

the Initial Order of the Honourable Mr. Justice Morawetz dated January 3, 2012) is

hereby extended until and including December 7, 2012.

APPROVAL OF MONITOR'S REPORTS

3. THIS COURT ORDERS that the report of the Monitor dated June 13, 2012

(the "Eleventh Report"), the report of the Monitor dated August 13, 2012 (the

"Twelfth Report", the report of the Monitor dated August 27, 2012 (the "Thirteenth

Report"), and the report of the Monitor to be filed in connection with this motion

(the "Fourteenth Report"), and the activities of the Monitor described therein are

hereby approved.

6008347 v4

Court File No. CV-12-9539-00CL IN THE MA ITER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED



(COMMERCIAL LIST)


ORDER (Re Stay Extension to December 7, 2012)

STIKEMAN ELLIOTT LLP Barristers & Solicitors 5300 Commerce Court West 199 Bay Street Toronto, Canada M5L 1B9



6008347 v4

IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED Court File No. CV-12-9539-00CL



(COMMERCIAL LIST)


MOTION RECORD (RETURNABLE SEPTEMBER 27, 2012)

STIKEMAN Eworr LLP Barristers & Solicitors 5300 Commerce Court West 199 Bay Street Toronto, Canada M5L 1B9



6008612 v1

Court File No. CV-12-9539-00CL IN THE MATTER OF THE AND IN...

Documents

Transcript of Court File No. CV-12-9539-00CL IN THE MATTER OF THE AND IN...